China Reforms One-Child Policy To Gain Competitive Edge

Nov. 15, 2013— -- Struggling with the economic fallout of its one-child policy, China will now allow couples to have two children if one of the parents is an only child. The current policy was enacted in the late 1970s to curb its explosive population, but has since created economic and cultural challenges.

Reform of the three decade-old policy is designed to address the nation's growth and concerns about wealth gaps, pollution and myriad social issues. It was announced today after a four-day meeting of top Chinese Communist Party leaders who will deliver the report to President Xi Jinping, according the state media agency Xin Hua.

"More attention also needs to be paid to employment, income levels, social security and people's health," the report said, urging "long-term balanced development of the population in China."

But in China's new booming economy, experts say the policy has weakened its competitive edge by not providing enough young future workers and leaving aging parents with fewer children to care for them.

In July, China introduced a new law that requires offspring of parents older than 60 to visit their parents "frequently" and make sure they are provided for financially.

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China's one-child policy was first implemented in 1979 to address overpopulation and to promote economic development, part of a "whole package of changes to amass clout and capability" in the world, according to Toni Falbo, a professor of psychology at the University of Texas at Austin, who specializes in Chinese families.

In an interview with ABCNews.com last April, she predicted imminent reform.

"No one thinks it will be permanent -- that's a stupid idea," she said. "Having 2.1 children is a replacement level. Two to replace the parents and .1 if a child gets sick and dies."

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The strict law has been applied only to urban families, who represent the highest portion of the population and where couples historically had more children.

"Rural people were more interested in helpers to work the farm and had more traditional values," said Falbo. "They would more likely want a son. Urban people were persuaded to have daughters. They are more worthwhile because they stay home."

But by the end of the 20th century, Chinese analysts began to be worried about the shrinking number of young workers and not enough children to take care of the elderly.

According to a March report in Forbes magazine, the one-child rule has "disrupted Chinese society both socially and economically. On the social front, you have two generations of Chinese adults who never had the benefits of growing up in the competitive environment of siblings. In fact, they likely grew up in a pampered environment that tends to create a society of self-centered people."

But Falbo's research did not support the stereotypes.

"By and large these only children are not the little emperors they are made out to be," she said. "We looked at careful methodologies and counted factors like socio-economic status, and they do pretty well and are surprisingly like everyone else."

Parents are fined when they have a second child, and some argue that has kept the policy alive. "The local officials don't want to lose this possible money source," said Falbo. "But I think all the demographers and people who have done population studies say it's time to let it go."